Marshall Islands in construction boom of several new projects

BY GIFF JOHNSON
Marshall Islands Correspondent

MAJURO, Marshall Islands — A construction boom with numerous major projects starting, in the design stage or finishing up are charging up economic activity in the Marshall Islands.

With a combination of donor aid from the United States, Taiwan and Japan — and anticipated support from the Asian Development Bank — the Marshall Islands is beginning or soon to start a new parliament building, a government capital complex, the new airport terminal for the Amata Kabua International Airport, and hospitals for two urban centers in Majuro and Ebeye.

All of these are expected to involve Pacific International Inc., the largest construction firm in the Marshall Islands and the only local company with capacity for managing major projects.

Two big projects — that employed hundreds of workers — are in final wrap up stages.

A new 11.5-million-gallon reservoir that has expanded water storage capacity by 30% was handed over to the Marshall Islands on Oct. 22. The $14 million reservoir was funded by the government of Japan and is considered a critical piece of infrastructure to support water security for an atoll that depends on rain for about 95% of its water supply. It increases water storage from 36 million gallons to 47.5 million gallons. Japan’s Dai Nippon Construction was the primary contractor that sub-contracted with Pacific International Inc. to build the new reservoir.

President Hilda C. Heine (center) is joined by Japan Ambassador Hirohisa Somo in the blue jacket next to Heine, for the official handover of a new water reservoir in Majuro on Oct. 22. Photo courtesy of the Government of the Marshall Islands

The new reservoir “represents a crucial investment in national water security and will significantly enhance our resilience against the challenges of drought and climate change,” Nicky Komanta, official at the Majuro Water and Sewer Co. “This upgrade ensures a more secure and sustainable fresh water supply, which is foundational to the long-term stability and future development of the Majuro community.”

The other big project that will soon finish is the repaving of the international airport runway in Majuro, along with improvements to the apron and fuel facility. The $34 million project was funded by the U.S. Federal Aviation Administration under its Airport Improvement Project.

Ground was broken in early October for the start of construction of the new Nitijela (parliament) building. The building was destroyed by fire at the end of August and government leaders put rebuilding the parliament on a fast-track by leapfrogging the capital building construction that was slated to begin soon.

Marshall Islands President Hilda C. Heine (center) with diplomats from the U.S., Taiwan, and Japan, and other VIPs at the groundbreaking to launch construction of a new parliament building. Photo by Chewy Lin

At the groundbreaking, President Hilda Heine said while the nation was saddened by the fire that destroyed the Nitijela, the government was moving ahead to deliver on its promise made in the days after the fire to construct a new building as quickly as possible.

The president was joined by representatives of the United States, Taiwan and Japan as well as landowners, Nitijela members and representatives of Pacific International Inc. (PII) that is building the facility. The US has pledged $13 million and Taiwan, which had already committed $33 million for a new capital building, is also providing funding for the parliament rebuild.

The Marshall Islands Cabinet chose to rebuild a new Nitijela using the same design for the building that first opened in 1993. PII built the earlier facility and maintained both the blueprints and the “as built” drawings, streamlining the process for constructing the new Nitijela chamber building, said Finance Minister David Paul.

David Paul, minister of finance is shown in a 2024 file photo. Photo by Chewy Lin

Other multi-million-dollar construction projects expected to start in the near future are:

The Amata Kabua International Airport terminal: The airport terminal project is now in detailed design phase. PII will perform significant landfill/land reclamation on the lagoon side of the existing parking lot area to create space for a new and enlarged parking lot — as the “temporary” (and later to be domestic) terminal funded by the U.S. and the Marshall Islands, and the bigger new international terminal building funded by Japan will need the entire area of the existing buildings and the current parking lot.
A temporary terminal, funded by the U.S., will handle passenger and cargo services while the dilapidated and deteriorating terminal is torn down. That terminal opened in 1952.Once the new terminal funded by Japan is complete, the temporary terminal will become the domestic terminal for use by Air Marshall Islands for its outer islands service.
Majuro and Ebeye hospitals: Plans for new hospitals in Majuro and Ebeye are moving ahead with the Asian Development Bank expected to play a key role in financing the work. U.S. funding for the hospitals is contained in the Compact of Free Association but would need to be piecemealed over many years to meet the expect $150 million or higher price tag.

The Marshall Islands government has been talking with both the ADB and the World Bank about up-front, low-interest loans to finance construction work using the 20 years of Compact infrastructure funding as collateral to pay off the loans over time.

The cost for Majuro hospital is estimated at between $100 and $140 million, while one estimate by the U.S. Army Corps of Engineers pegged the cost for a new hospital at Ebeye at over $300 million, according to Finance Minister David Paul.

But his view is that Majuro hospital can be completed for around $100 million and the Ebeye hospital possibly for $50 million.

“ADB is taking the lead (on the hospital projects),” Paul said. ADB had already approved a $17 million grant for an upgrade to the existing Ebeye hospital. Paul said discussions are in progress with ADB to reallocate this for a new hospital. The Finance Minister said funding provided through the Compact for Kwajalein infrastructure development could be used to match the ADB grant for Ebeye hospital.

The possibility of a “concessional” loan from ADB for up to $50 million, which has a low rate of interest and a 30-year payback period, is being negotiated. An additional funding option is to use money designated for infrastructure in the second Compact funding agreement that was left over when that agreement expired in 2023 and is available for use now, Paul said. mbj